Government consultations on pension changes, defined ambition pensions and money purchase schemes were announced in November. They are:
Consultation on defined ambition pensions
- The Department for Work and Pensions’ (DWP) proposal to introduce a defined ambition pension was first mooted in November 2012.
- The consultation, which will close on 19 December, proposes a defined ambition pension to create more certainty for employees, share investment risks more equally and help employers to continue to offer the best possible workplace pensions.
Consultation on money purchase schemes
- The DWP is also consulting on money purchase schemes in an attempt to clarify the definition of money purchase included in section 29 of the Pensions Act 2011.
- The consultation is open to pension industry bodies, trustees or scheme managers, pension scheme members and employers until 12 December.
- Under the proposals, organisations will be required to take four steps; submit their first scheme funding valuations by March 2015, calculate employer debts on any employer exits, pay Pension Protection Fund levies from 2015/16 and apply the new definition for wind-ups which began on or after July 2011.
Consultation on pensions charges
- The DWP proposes a cap on pension charges, which has been split into three options; a charge cap of 1% of the funds under management; a lower charge cap of 0.75%, reflecting the charging levels already being achieved by many schemes; and a two-tier ‘comply-or-explain’ cap, which would set a standard cap of 0.75% for all default funds.
- The consultation opened on 30 October and closed on 28 November 2013.
- Better workplace pensions: a consultation on charging follows the Office of Fair Trading’s market study into defined contribution pensions.